W.R. Berkley Q2 2025 Earnings Report

W.R. Berkley EPS Results

• Actual EPS: $1.05
• Consensus EPS: $1.03
• Beat/Miss: Beat by +$0.02
• One Year Ago EPS: $1.04

W.R. Berkley Revenue Results

• Actual Revenue: $3.10 billion
• Expected Revenue: $3.10 billion
• Beat/Miss: Missed by -$1.55 million
• YoY Revenue Growth: N/A

W.R. Berkley Announcement Details

• Quarter: Q2 2025
• Date: 7/21/2025
• Time: After Market Closes
• Conference Call Date: Monday, July 21, 2025
• Conference Call Time: 5:00PM ET

W. R. Berkley Corporation, an insurance holding company, operates as a commercial lines writers worldwide. It operates in two segments, Insurance and Reinsurance & Monoline Excess. The Insurance segment underwrites commercial insurance business, including excess and surplus lines, admitted lines, and specialty personal lines. This segment also provides accident and health insurance and reinsurance products; insurance for commercial risks; casualty and specialty environmental products; specialized insurance coverages for fine arts and jewelry exposures; excess liability and inland marine coverage for small to medium-sized insureds; and commercial general liability, umbrella, professional liability, directors and officers, commercial property, and surety products, as well as products for technology, and life sciences and travel industries. In addition, this segment offers cyber risk solutions; crime and fidelity insurance products; medical professional coverages; workers' compensation insurance products; general insurance; personal lines insurance solutions, including home, condo/co-op, auto, and collectibles; automobile, law enforcement, public officials and educator's legal, and employment practices liability, as well as incidental medical and property and crime insurance products; at-risk and alternative risk insurance program management services; professional liability; energy and marine risks; and provides insurance products to the Lloyd's marketplace. The Reinsurance & Monoline Excess segment provides treaty and facultative reinsurance solutions; property and casualty reinsurance; facultative reinsurance products include automatic, semi-automatic and individual risk assumed reinsurance; and turnkey products such as cyber, employment practices liability insurance, liquor liability insurance and violent events. The company was founded in 1967 and is headquartered in Greenwich, Connecticut.

W.R. Berkley Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Net income per diluted share rose 8.7% year-over-year, delivering a 19.1% annualized return on beginning-of-year equity.
• Positive Sentiment: The accident-year combined ratio before catastrophes was 88.4%, generating $261 million of underwriting income alongside record net premiums earned of $3.1 billion and net premiums written of $3.4 billion.
• Positive Sentiment: Record net investment income of $379 million benefited from a 20 basis-point increase in book yield to 4.7%, a AA-rated portfolio and an extended duration of 2.8 years.
• Negative Sentiment: Management flagged macro risks including potential tariff and wage inflation, federal deficits and ongoing social inflation as headwinds for underwriting and investment positioning.
• Negative Sentiment: Increased competition from MGAs and reinsurers in property and casualty lines was cited as eroding pricing discipline and requiring more selective underwriting.

Presentation

[Operator]

Ladies and gentlemen, good day, and welcome to W. R. Berkeley Corporation's Second Quarter twenty twenty five Earnings Conference Call. Today's conference is being recorded. The speakers' remarks may contain forward looking statements.

[Operator]

Some of the forward looking statements can be identified by the use of forward looking words, including, without limitation, believes, expects, or estimates. We caution you that such forward looking statements should not be regarded as a representation by us that the future plans, estimates, or expectations contemplated by us will in fact be achieved. Please refer to our annual report on Form 10 k for the year ended 12/31/2024 and our other filings made with the SEC for a description of the business environment in which we operate and the important factors that may materially affect our results. W. Berkley Corporation is not under any obligation and expressly disclaims any such obligation to update or alter its forward looking statements whether as a result of new information, future events, or otherwise.

[Operator]

I would now like to turn the call over to Mr. Rob Berkley. Please go ahead, sir.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Abi, thank you very much, and thank you to all participants for your time today and your interest in the company. In addition to myself, you also have our Executive Chairman, Bill Berkley on the call as well as Rich Baio, our Chief Financial Officer. We're going to follow our typical agenda where momentarily I'll be handing it over to Rich. He'll run us through some highlights from the quarter. He'll then pass it back to me.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I'll offer a few more sound bites, and then we look forward to taking people's questions and for that matter, taking the conversation in any direction participants wish to take it. Before I do hand it over to Rich, perhaps just stating the obvious, it is very much an interesting moment in the property and casualty space. We are reminded of the complications of this industry, an industry where you make a sale before you ultimately truly know your cost of goods sold. We have been grappling with this reality as an industry forever. But there are moments in time when it comes into sharper focus than others.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

We certainly over the past several years have had to grapple with financial or economic inflation and that was combined with social inflation, which we have talked about and I suspect we'll continue to talk about. But while on the heels of COVID, financial or economic inflation seems to be brought far more under control, there are some real threats to that. Certainly, are top of mind for all of us. In addition to that, one should not lose sight of what's going on in the labor market and what that may mean for wage inflation over time, particularly around some of the administration policies, that they are in the process of putting into place. And finally, there's the big question around deficits and what that will ultimately mean for the economy.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

And lastly, to what extent can we expect The U. S. Consumer to continue to be the driver and allow the economy to remain as resilient as it's been. These are amongst some of the macro questions that we are grappling with. Obviously, there's applicability to both our underwriting activities and how we think about selecting and pricing risk.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

And furthermore, I think it goes without saying there's meaningful applicability to the investment portfolio and how we think about positioning that. So as always, lots of moving pieces, trying to not just interpret what they all mean for today, but also how we think about positioning the business going forward. So let me pause there and hand it over to Rich, and I will follow him with a few more sound bites. Rich, over to you please.

[Richard Baio, EVP & CFO at W. R. Berkley]

Great. Thanks, Rob. The second quarter marked the continuation of strong performance in both underwriting income and net investment income. Net income per diluted share increased 8.7% over the prior year to $1 per share or $4.00 $1,000,000 with an annualized return on beginning of year equity of 19.1 percent. The definition of operating earnings commencing with this quarter has been changed to exclude after tax foreign currency gains and losses.

[Richard Baio, EVP & CFO at W. R. Berkley]

Accordingly, operating earnings were $420,000,000 or $1.05 per share, yielding an annualized return on beginning of year equity of 20%. Starting with underwriting performance, our current accident year combined ratio before cat losses of 3.2 loss ratio points was 88.4% comprised of an accident year loss ratio excluding cats of 59.9% and expense ratio of 28.5. The calendar year combined ratio was 91.6% resulting in $261,000,000 of underwriting income. Cat losses were $99,000,000 in the 2025 compared with $90,000,000 or 3.2 loss ratio points in the prior year's quarter. While the industry saw an above average frequency of severe storms, the point impact of cat losses on our combined ratio remained flat even as the dollar amount of losses marginally increased with the growth in our property book of business over the prior year.

[Richard Baio, EVP & CFO at W. R. Berkley]

Drilling down further, the Insurance segment's quarterly accident year loss ratio ex cats was relatively flat year over year and sequentially at 60.7%, bringing the accident year combined ratio before cats to 89%. The Reinsurance and Monoline Excess segment's accident year loss ratio ex cats increased to 54.1% with a strong accident year combined ratio before cats of 83.8%. The expense ratio overall was flat at 28.5% and continue to benefit from the growth in net premiums earned, which was a quarterly record of $3,100,000,000 In addition, net premiums written increased to a record $3,400,000,000 in the quarter with growth in all lines of business in both segments. Record net investment income of $379,000,000 benefited from the ongoing growth in the invested assets from strong operating cash flow and new money rates on fixed maturity securities that remain comfortably above our average book yield. Investment income from fixed maturity securities excluding Argentine inflation linked securities improved 16.5% year over year with an increase in book yield of 20 basis points to 4.7%.

[Richard Baio, EVP & CFO at W. R. Berkley]

Our investment funds performed above our expected quarterly range of 10,000,000 to $20,000,000 with strong results of $27,000,000 driven by transportation, infrastructure and financial services sectors. The quality of our portfolio remains very strong at a AA- with the duration on our fixed maturity portfolio, including cash and cash equivalents, increasing from the fourth quarter of two point six years to the current quarter of two point eight years. Foreign currency losses in the quarter of $55,000,000 related to the weakening U. S. Dollar relative to most other currencies.

[Richard Baio, EVP & CFO at W. R. Berkley]

Offsetting this income statement loss is an improvement in the currency translation loss and stockholders' equity of $69,000,000 The effective tax rate was 23.2% in the quarter, which is in line with our expectations for the full year of 2025. The rate exceeds The U. S. Statutory rate of 21% due to taxes on foreign earnings at higher rates and state income taxes. Stockholders' equity increased by more than $380,000,000 or 4.3% over the 2025 to a record $9,300,000,000 After tax unrealized investment losses improved by $120,000,000 to a balance of $249,000,000 as of 06/30/2025.

[Richard Baio, EVP & CFO at W. R. Berkley]

From a capital management perspective, we paid ordinary and special dividends of $224,000,000 in the quarter, bringing our growth in book value per share before dividends to 6.8% in the quarter and 14.3% on a year to date basis. Our balance sheet remains strong with cash and cash equivalents of more than $2,000,000,000 and historically low financial leverage of 23.4%. So in summary, another great quarter with exceptional risk adjusted returns and excellent underwriting and investment performance. Rob, with that, I'll turn it back to you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Great, Rich. Thank you very much. So maybe just to follow on Rich's comments, a couple of additional thoughts. First, I think as everyone on the call is acutely aware, this is still very much a cyclical industry. As we have discussed in the past though, one of the changes that has happened over the past, I don't know, sort of five to ten years is a decoupling of product lines as to where they are in the cycle.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So the cyclical nature still exists, but where different major product lines are in the cycle, they are certainly no longer in lockstep. To that end, a couple of thoughts on the insurance marketplace. One, the property market, clearly, marketplace is becoming more competitive as we have discussed for a couple of quarters now. Probably two drivers there, one would be a reinsurance marketplace that is becoming more competitive and is willing to provide capacity at a lower rate. And the second piece is as discussed by some the MGA market, which is becoming clearly more active and I'll offer a few thoughts on the MGA market a little bit later in my comments.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I would tell you that the property market, there is a notable bifurcation while the general direction is more competitive. The larger accounts, particularly shared and layered as we've discussed in the past couple of quarters is where greater competition is. The smaller accounts, it's not that there isn't competition, but it pales in comparison to the larger end of town. As far as commercial transportation, again, another product line where there is a fair amount of activity coming from MGAs. That marketplace, we continue to and others seem to be pushing for rate.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

But without a doubt, the MGA participants are creating at least a short term headwind for that market truly going hard. My expectation is that that's a bit of a kink in the hose, if you will. And consequently, it is going to build up pressure and ultimately will inure to the benefit of responsible long term participates when that snaps and the market shifts. Professional liability, again, a bit of a mixed bag as we all have a shared appreciation, a very broad space. Just a couple of highlights on D and O.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

It would seem as though the public D and O market is beginning to find some sense of bottom. Private and non for profit D and O remains particularly competitive as the sum of what I would define as miscellaneous E and O. There is again an MGA component to it since people seem to be very fixated on the topic. I thought I'd flag that as well. As far as the casualty lines, clearly there is opportunity to get the rate that the product line needs.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

It is pronounced both in the primary casualty as well as the umbrella and excess. And finally, as far as workers' compensation goes, presumably all had an opportunity to take note of the action coming out of California. I think some time ago, we had flagged for those that were willing to listen that it seemed as though California as opposed to in the more distant past this time around is out in front of the rest of the market as far as firming. I think the action taken by the commissioner approving 8.7% effective nineone percent certainly a strong message that was well received by us and we look forward to more coming behind that. I think one other comment I would make would be around the consumer space, particularly P and C personal lines.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

As you all know, we have a meaningful participation in the private client space, which is a very different business from what I would define as mass market. It is a part of the market that is built or driven by knowledge and expertise, and we have a a business that is really coming into its own in that space and has been a great contributor not just to the top line, but to the the bottom line as well. And those market conditions remain ripe and we are pleased to have that opportunity. I mentioned reinsurance earlier as far as the reinsurance marketplace providing capacity within the property lines, perhaps the discipline I think eroding. I think we've talked about that in the past.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

It continues to erode. We'll have to see how quickly it remains and what the how steep the trajectory is, I should say. And finally, we've expressed our disappointment with the discipline, particularly on the casualty lines within the reinsurance space. I offered a couple of sound bites about MGAs just as a broad category earlier. And within the industry, people tend to oftentimes use some terminology, perhaps somewhat casually and almost interchangeably around MGA, MGU, and ultimately really falls under the category, if you like, of delegated authority.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

There is no doubt that inherently in many of the delegated authority models, there is a mismatch or a lack of alignment in of interest between those with the pen and those with the capital. It is not that all of these relationships are bad. Some of them are quite good. One just needs to have their eyes wide open and understand that it is not a perfect alignment of interests and make sure that it is controlled appropriately. That having been said, there has been extraordinary growth in the MGA space.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

A lot of it has been generated by new entrants that lack expertise. A lot of it has been supported by reinsurance capacity that seems to have an unquenchable thirst for growth without necessarily their finger fully on the pulse. We'll have to see how this plays out. I think for many of us that have been around for at least a little while and those that have been particularly those that have been around for a long while have seen some version of this movie. You know, in some ways, it's the same.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

In other ways, it's different. Perhaps the only difference is that it's a different cast of characters. One final anecdote on the NGA front, I would tell you that over the last sixty to ninety days, it's been a startling number of inbound calls that we have gotten from investment bankers suggesting that MGAs that they have to sell, would we be interested in buying them? And typically, they are capitalized or owned by private equity. So oftentimes perhaps a leading indicator that the music is slowing and we'll see who has a seat at the end, though oftentimes that does take some time.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Rich, as always, did a really thorough job as it relates to the quarter and the numbers, I would just call out the rate at the 7.6% ex comp continues to be meaningful and puts us in a comfortable place. Rich talked about the loss ratio. Again, I'm not going to go into a chapter and verse. The 3.2 points of cat was really frequency by industry standards modest severity. And then lastly, would have it's worth noting the duration of the investment portfolio edging out to two point eight years.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Again, think this is exactly what we suggested we would be doing if the story unfolded the way it has. We continue to believe that our strategy is the right one, making sure that we are getting an appropriate risk adjusted return. I think as Rich alluded to the cash flow of the organization remains very healthy. The growth in the investment portfolio remains quite significant. And if you think about a new money rate for us today is running about give or take 5.25% and the book yield on the portfolio ex Argentina is 4.7 that certainly bodes well for where investment income is going for the foreseeable.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So long story short, we can't control the environment, but we can control our actions. We remain very focused on making good risk adjusted returns. The decoupling of product lines and how they make their way through the cycle combined with the breadth of our offering allows us to continue to grow when others perhaps are experiencing more of a headwind. In our opinion, you certainly are seeing different product lines at different points of transition. We have historically and continue to be more of a liability market and we think that much of the liability market is where the opportunity will likely be over the next twelve to thirty six months.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So again, we think we're well positioned on the underwriting side. We think we're well positioned on the investment side. And it is our expectation that we will be able to continue to grow earnings in a very thoughtful and controlled manner. So with that, Abby, I will take a pause and we're very pleased to open it up for questions. Thank you.

[Operator]

Thank you. And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

[Operator]

Again, it is star one if you would like to join the queue. And our first question comes from the line of Rob Cox with Goldman Sachs. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hey, Rob. Good afternoon.

[Robert Cox, VP - Equity Research at Goldman Sachs]

Yes, just first question on growth. Just thinking about the growth potential here. I know it's a tougher quarter with the property pricing deceleration. But just curious if you all still view this as sort of a 10% to 15% growth environment? Or has the last few quarters changed that?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Look, I think we had come out with that band, if you will, probably, I don't know, call it eighteen months ago, maybe twenty four months ago. If you're asking my best guesstimate at this stage in spite of the number that we saw in this quarter, my view is that it's probably somewhere between eight and twelve would be my guess as opposed to 10 to 15.

[Robert Cox, VP - Equity Research at Goldman Sachs]

Okay. Got it. That's helpful. And then just curious on the underlying loss ratio. I think last quarter you all mentioned that the impact of the outward reinsurance program was a business mix related headwind.

[Robert Cox, VP - Equity Research at Goldman Sachs]

This quarter the underlying loss ratio at least in insurance seems pretty flat. Anything else unusual to call out there or is that just normal dynamics?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think it continues to primarily be mix as far as the loss ratio.

[Robert Cox, VP - Equity Research at Goldman Sachs]

Got it. Thank you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thank you.

[Operator]

And our next question comes from the line of Alex Scott with Barclays. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hi, Good afternoon.

[Alex Scott, Equity Research Analyst at Barclays]

Hey, good afternoon. You mentioned tariffs and labor costs in your opening remarks. And I just wanted to understand if you're actually seeing anything coming through, if that's more of a forward looking statement. And obviously, there's a wide range outlook.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

It is a forward looking statement. We are not seeing it in any noteworthy way in our loss activity right now. At the same time, we are conscious of the fact that that concept of timing, that I referenced in conjunction with the point that you're flagging, and we wanna make sure that we're not caught flat footed. I think that at this stage, given the, what we're seeing coming out of the administration, it's it's hard to imagine that that tariffs are going to prove this to be something that goes away, but we'll see. And as far as the the labor piece goes, you know, from our perspective, you know, ultimately, when when the day is all done, just given the the position around immigration immigration and related activities and the actions that the administration are putting into place, there is no doubt that there are certain jobs that are gonna meet need to be filled at a different payroll point than they have been. And ultimately, that presumably will drive labor costs.

[Alex Scott, Equity Research Analyst at Barclays]

That makes sense. Second one I have is on the trajectory of margins from here. I mean pricing still remaining pretty firm. It seems like you guys are being disciplined and still getting pretty good rate in there. But just wanted to understand, is it still above loss cost trend? Can margins still improve from here or remain flat?

[Alex Scott, Equity Research Analyst at Barclays]

And would you expect sort of the mix shift with casualty being the bigger opportunity maybe to affect it one way or the other?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think when the day is all done, we feel comfortable that the rate that we are achieving is positioning us well, not just for today, but for tomorrow as well. So can things in improve here? Yeah. I think things can, improve from here. But at the same time, we are all regularly reminded that there is no reward for declaring victory prematurely.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

And in addition to that, we are also regularly reminded of all of the significantly leveraged variables that one should not reach a conclusion about prematurely.

[Alex Scott, Equity Research Analyst at Barclays]

Understood. Thank you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thank you.

[Operator]

And our next question comes from the line of Elyse Greenspan with Wells Fargo. Your line is open.

[Elyse Greenspan, Managing Director at Wells Fargo]

Hi, thanks. Good evening. My first question is actually on capital. You guys didn't buy back any shares in the quarter. Just wondering what drove that decision?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Look, ultimately, Elyse, when the day is all done, as we've shared with you and others in the past, we have a view as to how much capital we have and what type of surplus we have at any moment in time. We have a view as to what we see as opportunities potentially before us and want to make sure that we have a surplus of gas in the tank. And in addition to that, ultimately, there's a judgment made around to the extent there's above and beyond what is the most efficient way to return that to shareholders. As Rich flagged in his notes, it's not that we weren't returning capital to shareholders, We returned a few $100,000,000 to shareholders. It just seemed at that moment in time that the most efficient and effective way to return the money to the people that belonged was through a a special dividend.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I would strongly encourage you and others not to lead to the assumption that that we are out of the repurchase market because that is not the case. We evaluate that tool along with other tools every day. And again, what we think is the most practical answer to the surplus of capital question. Obviously, we can do our own math as others can do their math as to what we believe real book value is as opposed to this cockamamie accountant version of math. And we also have a view on the earnings power of the business going forward, which I would add we are quite optimistic about.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So again, I would encourage you not to count us out of the repurchase activity.

[Elyse Greenspan, Managing Director at Wells Fargo]

Thanks. And then my second question, you guys gave the underlying loss ratios right by segment. So I back into around, I guess, 6,000,000 adverse in insurance and I think just around $8,000,000 favorable in reinsurance. Within that $6,000,000 in insurance, is there anything, obviously, a large amount of reserves, but anything to call out that, you know, particularly moved relative, to your reserves in the quarter?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Nothing particularly noteworthy. It's just that, you know, as we've shared with you and others in the past, you know, we look at it every 90 days. Well, we're looking at every day, but every 90 days, we're looking at it at a pretty granular level and, you know, a couple of bits and pieces moving around. That's all.

[Elyse Greenspan, Managing Director at Wells Fargo]

Thank you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thank you.

[Operator]

And our next question comes from the line of Mike Zaremski with BMO Capital Markets. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hello, Mike. Good afternoon.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Hey. Good afternoon, Rob. On the 15% Mitsui stake, any update on the the time frame and timeline there?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I know no more than anybody else or at least anybody else who bothered to read the SEC filings. Again, I think as we I don't know if we shared or not. If we didn't, I should have. That we, design, have not been privy to sort of where they stand in their process because in no way, shape, or form, perhaps back to one of Elise's points, we don't want to be encumbered or restricted in any way in our ability to repurchase stock. So the short answer is I have no idea.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Understood. But we'll we we should see disclosure once it gets it's over 5 percent. Is that correct?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I do I have a high degree of confidence that they will fully comply with any regulation from the SEC from a filing perspective. I've my understanding is that I think to comply with the SEC, they're gonna need to do a filing once they reach, 4.99 or call it 5%. And as far as I'm aware, they have not done that yet.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Got it. Understood. Maybe pivoting, Rob, to, the medical inflation environment as it pertains to your work comp and, I believe also stop loss portfolio. You know, we are obviously seeing all the headlines that you've been seeing. You know, any updates to and you mentioned California as well, obviously, earlier, but any any kind of updates on the macro level to the Berkeley's views on medical inflation potentially making their way into the comp and or A and H arena?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Well, I think it has been and continues to be something that our colleagues and by extension Rich, the chairman and I are are focused on. And, you know, as we've discussed, it's a very leveraged assumption. Maybe the only other wild card that I I would layer on top, Mike, is, you know, the the commentary that has come out of the administration regarding its desire to onshore pharmaceutical, in particular, manufacturing. And I think it was just a couple of weeks ago that there was a comment that came from the president that suggested he was entertaining the possibility of a 200% tariff on all pharmaceuticals that are imported. That having been said, I just read earlier, today that the discussions with the EU would suggest there would be no tariffs on, pharmaceuticals or medical devices.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So, you know, I think for all of us, the message perhaps is just stay tuned. But without a doubt, if we saw a levy to the tune of, 200% on pharmaceuticals, that's something that would have an impact. And perhaps to jump ahead and and, anticipate your question, yes, we have done quite a bit of sensitivity analysis as to what that would mean for us. And at the moment, we feel comfortable that we can manage through that.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Okay. That's that's helpful. And then lastly, Rich, I believe I heard you talk about the new operating earnings, a non GAAP definition. Any just we'll go back and check, but does that change historicals by like very low single digits? And any any reasoning we, we should be aware of on on why the change?

[Richard Baio, EVP & CFO at W. R. Berkley]

I think it's really a couple of things. One, what we've noticed, and we've had some conversations with some of the equity analysts over the last few quarters in terms of some of the volatility that's been coming about as a result of, some of the changes that Rob has alluded to since the new administration. And with the equity analyst not really including it because it's not modeled in, we felt it was a a more straightforward approach with regards to, having foreign currency gains and losses excluded. And you would see if you were to go back over time, there has been some volatility from period to period, but in particular over the last couple of quarters, we've seen quite a bit.

[Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets]

Thank you.

[Richard Baio, EVP & CFO at W. R. Berkley]

You're welcome.

[Operator]

And our next question comes from the line of Andrew Kligerman with TD Cowen. Your line is open.

[Andrew Kligerman, Managing Director at TD Securities]

Hi, good afternoon.

[Andrew Kligerman, Managing Director at TD Securities]

How are you? So Rob, you mentioned in the write up rate increases were 7.6% ex workers' comp. And I know that you're kind of writing a more specialized higher risk line. So I was just kind of curious, how is the workers' comp pricing doing in that arena? And any other color on the workers' comp in addition to your prepared remarks you might call out?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Well, thanks for the question, Andrew. The answer is that I think what you perhaps are referring to is some of the higher hazard stuff where we see growth opportunities from time to time. Saw particularly in the first quarter, it was still there in the second quarter, but perhaps not to the the same street. That having been said, we we do like the pricing there, and that's why we're leaning into it. And while we maintain a little bit more of a defensive posture with the main street stuff, the what I would define as the higher hazard, more specialty in nature, we're we're very pleased with the opportunities that that we see there.

[Andrew Kligerman, Managing Director at TD Securities]

Got it. And you Rob, you you mentioned in your remarks some some disappointment with commercial auto. As I look at the numbers in your release, net written premium looked up it looked like it was up roughly 10%. So is that all just rate and and you're just are you feeling confident in the book that you have?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Yes. We're confident in the book. And as far is it rate? The answer is yes and and then some.

[Andrew Kligerman, Managing Director at TD Securities]

I see. Okay. Thanks a lot.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Sure. Thanks for the question.

[Operator]

And our next question comes from the line of Mark Hughes with Truist. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hello, Mark. Good afternoon.

[Mark Hughes, Analyst at Truist Securities]

Yeah.

[Mark Hughes, Analyst at Truist Securities]

Thank you. Hello, Rob. Hello, Rich. On the, other liability line, the growth was just a little bit slower this quarter. You expressed some kind of continuing optimism about primary and excess.

[Mark Hughes, Analyst at Truist Securities]

At the same time, you kind of dialed back your growth outlook just a little bit. Are you seeing any kind of inflection in that core GL or excess market? Or is that still consistent with prior couple of quarters?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Yes. We're still encouraged by the opportunity that we see there. So my recalibrating, if you will, as far as the growth opportunity is really a couple of fold. One, on the commercial property opportunity, I think that there's going to be a bit more of a headwind. I think the casualty piece that you just referred to, I think that opportunity very much remains there.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I also think just going back to the commercial auto piece, I think that that will prove to be a terrific opportunity, but it's gonna take a little bit longer to to get there. On the other hand, I think that on the the reinsurance front, property, in particular, has probably seen its best day for some time. And for the life of me, I don't understand why the casualty marketplace isn't getting a little more backbone.

[Mark Hughes, Analyst at Truist Securities]

Yeah. On the, MGAs that are knocking on your door, is that always a hard no, or is that something you might consider if the valuation was right? Or are they just, their expectations are above and beyond what you'd ever consider paying?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

You know, ultimately, the day is all done, we evaluate every opportunity as you'd expect on it on its own merit. Having been said, you know, we we take, the expertise and the responsibility to capital very both of those things very seriously. So while we're always open to conversations, it's a pretty high hurdle to truly get us to wanna engage.

[Mark Hughes, Analyst at Truist Securities]

Thank you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thank you.

[Operator]

And our next question comes from the line of David Motemaden with Evercore ISI. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hi, David. Good afternoon.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Hey, Rob. Good afternoon. Just a follow-up question maybe there to Mark's question. You had mentioned the bifurcated property market between large and small or large and small and middle, maybe we'll call it SMID. Do you see that dynamic going in the opposite direction in some of the other markets like casualty where maybe large accounts are seeing some rate increase acceleration and that's yet to really seep down and play out in the small to middle market?

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Or, you know, just hoping to get some color there in terms of how you're thinking about the opportunity.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Look. I I think taking a half a step back, focusing on the the, casualty stuff, both primary and access, I think the reality is that social inflation impacts the full spectrum. That having been said, without a doubt, plaintiff attorneys tend to view limits as candy. And so the bigger the limits that are available, the more focus they get. That has been the case for some number of years at this stage.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Do I think that we have seen an effort amongst the plaintiff attorney to go a little bit down market? Yeah. I I do, but not dramatically. So when the day is all done, I think my expectation is that you're gonna continue to see opportunity in some of the the larger end of town, and that will continue to really waterfall through the whole casualty marketplace. The good news is for the smaller accounts, they tend to be a little bit more insulated, and the rate environment tends to be a little bit more sticky.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So similar to perhaps one of the points you were making, the property market, the larger accounts are the ones that get targeted and you get the greatest feeding frenzy around early on. Well, that applies to casualty too. So the rates are going up on the larger accounts in casualty, but the smaller and middle market is following and it tends to be stickier.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Got it.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Thanks. And then maybe just follow-up here just on the tariffs. At least on the insurance side, it didn't really look like there was anything going on in terms of the loss pick reinsurance. The underlying loss ratio did tick up. It doesn't look like you guys have embedded that into your view of loss trend.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Maybe just you know, how are you thinking about that? And and, you know, is that something you guys are considering doing?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

It's certainly something that we're grappling with. We are paying close attention to it. We are already factoring it into how we think about required rate or rate need and we're going to see how it unfolds from here. Obviously, the impact of tariffs, while it may have applied to a broader cross section of product, It is heavily weighted towards the shorter tail lines, so APD or property. At least that's how it would appear today, barring, you know, pharma, etcetera, that we referred to earlier.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So that that's where we're focused, and we'll see how it unfolds. But yes, it is top of mind and action is being taken from a pricing perspective.

[David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI]

Understood. Thank you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thanks for the questions.

[Operator]

And our next question comes from the line of Wes Carmichael with Autonomous Research. Your line is open.

[Wes Carmichael, Senior Analyst at Autonomous Research]

Hey, thank you. Good evening. On the investments portfolio, I think Rob in your prepared remarks you mentioned some moving pieces in terms of what you may do going forward. And so I heard you had extended duration a little bit, but is there anything else that you might be thinking about in terms of potential repositioning or other actions on the portfolio?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think we generally are of the view that the fixed income portfolio is particularly well positioned. I think that our expectation is certainly given what you hear coming out of Washington, the yield curve may steepen a little bit from here and that may be a catalyst or an opportunity where we'll choose to take the duration out a little bit further. Perhaps answering the question with a slightly different bent consistent with messaging in the past, while we have not completely turned our back to the alternative space going forward from a new money perspective, given the opportunities in the fixed income market, it's a pretty high hurdle. So we're we're pretty pleased with how things are positioned today, and we think we have a lot of flexibility regardless of what tomorrow will bring.

[Wes Carmichael, Senior Analyst at Autonomous Research]

Got it. Understood. And maybe my follow-up just to come back to to property and, Rob, you talked about larger shared and layered property being more competitive. But when you kind of look at the market today, obviously, there's a little bit more rate pressure there in property. But any any color you can share on your view of rate adequacy in the market at this point?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think generally speaking, it's, you know, it really took off to the moon. And I think it's still in a good place, and we're happy to write it. But we are being forced to be give it very, very selective and careful. And I think, you know, it's not just about where it is today. It's also where you see it going tomorrow.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

And our colleagues are, yes, writing business today, but they're also trying to position the portfolio in anticipation of what tomorrow's conditions will be. So, yes, I think the the larger accounts, the shared and layered accounts, you're seeing more competition there. You're seeing a bit more of a feeding frenzy. By and large, we're still happy with the pricing, but that will not be indefinite. And we have no problem when we don't think that the rate is adequate to walk away.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

And we will be there when the opportunity presents itself again as we have been in the past.

[Wes Carmichael, Senior Analyst at Autonomous Research]

Thank you.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I should add those comments around market conditions again are very much focused on the commercial lines marketplace. On the private client stuff, we continue to be pleased with by and large the opportunities before us.

[Operator]

And our next question comes from the line of Ryan Tunis with Cantor Fitzgerald. Your line is open.

[Ryan Tunis, Managing Director at Cantor Fitzgerald]

Good evening, guys.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Good morning.

[Ryan Tunis, Managing Director at Cantor Fitzgerald]

I guess just keeping it on the property discussion, Rob, it's kind of a broad question, but why are we still seeing better growth in, in the property lines and the other liability given given your assessment of things?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think a lot of the property growth is is really coming from, well, a, we as I said a moment ago, we still think that there's opportunity there. So just because rates are down doesn't mean you don't wanna write the business. I think the other piece that is worth noting is our private client business that I referred to before or said differently, our network personal lines business, and that is a contributor there as well.

[Ryan Tunis, Managing Director at Cantor Fitzgerald]

Got it. And then just, I guess, a little maybe a more detailed one, maybe for Rich, but, the corporate costs or the but I I I don't know what you guys call them. Other costs and expenses, that ticked up this quarter. Are we in a new type of run rate there or were there some new launches? Or just curious what's going on with that.

[Richard Baio, EVP & CFO at W. R. Berkley]

Yes. It's up really, Ryan, for a couple of reasons. One is, with regards to the special dividend that we paid in the second quarter. As it relates to that dividend, it comes through on vested mandatorily deferred RSUs. So effectively, it's characterized as compensation.

[Richard Baio, EVP & CFO at W. R. Berkley]

And so that is a meaningful contributor in in the current quarter. So that would obviously move around depending on future timing of special dividends or not. And then the second is you might have seen that, we had announced a few quarters ago two new operations, our embedded solutions and our India branch. Similar to what we've done in the past, those expenses when they're in the incubation stage are reflected in our corporate expenses. And then when they get to some relative size in terms of generation of premium, we'll move that out of corporate expense on a prospective basis, and that would be reflected in our underwriting results.

[Ryan Tunis, Managing Director at Cantor Fitzgerald]

Understood. Thanks.

[Richard Baio, EVP & CFO at W. R. Berkley]

You're welcome.

[Operator]

And our next question comes from the line of Josh Shanker with Bank of America. Your line is open.

[Josh Shanker, Managing Director at Bank of America]

Hi, Good evening, everybody.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Evening.

[Josh Shanker, Managing Director at Bank of America]

Hello. So, Rob, in your prepared remarks, it was almost like a throwaway. The last thing you mentioned was being really displeased with the direction of trend in casualty reinsurance markets. And, you know, from my perspective, a lot of casualty reinsurances just quota share that the underlying risk sets the pricing, and then you have some question about what's going to be the ceding commission. But, obviously, there's XOL in the in in in, you know, some facultative and other types of business that obviously have a set price. Can you go a little into what you meant about the being disappointed in the trends on the cash and the insurance direction?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Yeah. Absolutely, Josh. Thanks for for flagging that. So long story short, and I should have been more specific about it, the, thorn in the side is primarily the the ceding commissions where we just think that the reinsurance marketplace, when we're playing the assumed game, should be, looking for better terms. Obviously, we have a different view when we're exceeding the business, but that that is what I was referring to.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

In addition to that, just less, consequential as far as, percent of the marketplace or for that matter, percent of our portfolio, we found that the the CASFAC market, is one where we would have hoped to have seen a bit more discipline, at this stage. By the way, mapping back to some of the other comments, particularly around the commercial auto space.

[Josh Shanker, Managing Director at Bank of America]

And I just understand on the ceding commissions, that's you're talking about that the ceding commissions are too low in your primary book when you were when you're trying to seed or they're too

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

assuming the business, and I'm saying from a self serving perspective, we'd like them to be lower when we're seeding the business or an insurance.

[Josh Shanker, Managing Director at Bank of America]

Yeah. Okay. That makes sense. And then Yes.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

We would like our cake and tea in it too, Josh.

[Josh Shanker, Managing Director at Bank of America]

Yep. I I get it.

[Josh Shanker, Managing Director at Bank of America]

I get it. And and then trying to you know, if I go back, you know, three years ago when the ten year was sub 2%, and now we're at, like, one where it's trying to get above 5%. And And there may be some griping about where prices are in various markets. But I assume in an efficient market, the price of yield on investment should have some impact on the underwriter's ability to make money on the underwriting. When when we say we don't like the direction of pricing, is is pricing much worse?

[Josh Shanker, Managing Director at Bank of America]

Because there's definitely for the market and certainly you as well. You're making a whole lot more money on the investment income. So to what extent is it reflective of just a different investment paradigm?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So Josh, I very much appreciate the point that having and clearly, there is an economic model here and there is a relationship between investment income and underwriting profit and how it all comes together to deliver an outcome. That having been said, let's understand that perhaps the most competitive part of the market is in some of the shorter tail lines, I. E. Property, where investment income is making the most modest contribution. So do I think that there is an impact?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Yes. Do I think that that is gonna take us back to the world of cash flow underwriting? No, sir. I do not.

[Josh Shanker, Managing Director at Bank of America]

Okay. Thank you very much for all the answers.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thank you, Josh. Have a good evening.

[Josh Shanker, Managing Director at Bank of America]

You too.

[Operator]

And our next question comes from the line of Brian Meredith with UBS. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hey Brian, thanks.

[Brian Meredith, Managing Director at UBS Group]

Hey Rob. Evening. So Rob, wonder if could talk a little bit about what the competitive dynamics are like right now in the private client business. Are there more opportunities there because maybe some players are pulling back or are we seeing any more competition at marketplace?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think that, certainly, there are some, you know, the the obvious names participating in in the space. I think each organization or competitor has their own approach to the business. I think there are some that are primarily riding the coattails of a brand that they have, and I think there are others like ourselves that are really through the expertise of of people and our team, bringing value that's very visible to both distribution and insured. So when the day is all done, why are we getting the traction we are? Because we certainly are not the cheapest, but I would argue we're the best value.

[Brian Meredith, Managing Director at UBS Group]

Makes sense. Thanks. And then second question, just curious, the underlying combined ratio mentioned in the reinsurance, it looks like it's kind of elevated relative to where it's been the last couple of years. Is there anything unusual going on in the quarter catch up or something that happened?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Not particular. I think it's really two things just tying in with the comments earlier. Partly, it ties in with my bitching about ceding commissions and also ties in with the comments around property rates and where they are. And the fact is that the reinsurance market is not charging as much for property or for that matter property cap, in particular, today as it did yesterday. So on both of those fronts, when we think about the changes, our our colleagues are reacting to that and what we believe is a very thoughtful manner. Great. Thanks. Thank you.

[Operator]

And our next question comes from the line of Meyer Shields with KBW. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hi, Meyer. Good afternoon or evening, Tyler.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Hi, Rob. Good evening, I'm sorry.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Two, I think, quick questions. First of all, among your clients, are you seeing increasing demand for higher limits on the various task of the alliance policies?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Are we seeing increasing demand from our clients? I think that ultimate are we talking about larger or smaller accounts? Just to make sure I'm following there. Sorry.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

I asked I was assuming the smaller ones.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

You were thinking of the smaller ones.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Yes.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Not not consequentially. You know, they are still looking to buy the typical primary and oftentimes if they're looking to buy the the the same umbrella. So said differently, I'm not sure that the insureds or for that matter, their distribution is directing them to think about their exposure in a materially different manner than they did yesterday in spite of social inflation.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

It's just not something that the smaller accounts are thinking about as much as the larger accounts are. I think for given the rate increases that have come about in response to social inflation amongst other things, I think you have a lot of insurers out there trying to think about not just what do they need, but also what can they afford. And I know you're talking about this sort of main street casualty, but I would suggest to you that that is perhaps particularly visible in the commercial auto space where a product line where you've seen perhaps or arguably the greatest level of social inflation, consequently, significant rate need, being pushed and more probably to come. And you have insured sitting there saying, I don't know if I can afford this. I don't know how I make my economic model work.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

And sometimes you have insurers that are sitting there saying, I'll buy the primary, but the excess that I used to buy, maybe I'll buy less or maybe I'll have to fix self insure, which, you know, sadly is a big rolling of the dice.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

Okay. Yes, that's very helpful. I just wanted to get a sense of that. Second question, you talked about the loss cost increase that was approved in California. When you look at California's workers' compensation market, is that a good proxy or leading indicator for us in the country?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Historically, if you look back over cycles, California has been a laggard as opposed to a leader. As we've suggested, I think for probably a while now, our view was that California was out in front as far as a firming market. Do I think it is a perfect proxy for the rest of the country? No, sir. I don't.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think California is, you know, definitely a unique animal. That having been said, I would offer the observation that if you got a product line's rate enough, eventually, it ends badly. In addition to that, as some colleagues were flagging earlier, and I think we are all have an appreciation for is that medical trend is not working in the workers' comp market's favor. And I think also as we've discussed in our opinion, there's a pinch point or it's been artificially held back or suppressed because of how it prices off of Medicare, I believe it is, in many states. So what do I think?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

I think that the California response is warranted and then some. And I don't think it's a perfect indicator for the rest of the country, but it is an indicator that ultimately, if you take enough rate out of it, eventually it ends badly and response is required.

[Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)]

That's very helpful. Thank you so much.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thank you.

[Operator]

And our next question comes from the line of Andrew Anderson with Jefferies. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hi, Andrew. Good evening.

[Andrew Andersen, VP - Equity Research at Jefferies Financial Group]

Hey. Hey, good evening. Maybe just on the D and O market, can you remind us, do you guys focus more on the public or the private end? And I guess where I'm going with this is, does kind of a a rebounding m and a and IPO, market provide some upside for premium growth here?

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So the answer is, all of the above. And certainly, IPO activity would be well received. And I I guess all we need to do is get the SPAC market going again, and then we can have a party.

[Andrew Andersen, VP - Equity Research at Jefferies Financial Group]

Fair enough. Okay. And then short tail lines within insurance. Your comments on the high net worth homeowners, but would be interested because there's a a few other lines in there, kinda what you're seeing within a and h or inland marine.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

From our perspective, a and h, continues to be an attractive part of our business. We participate in that marketplace in a a couple of different ways, and I don't wanna bore everyone on the call with it. But if you have interest, we're happy to follow-up offline. As far as the inland marine fees, by and large, that tends to run semi, I wouldn't say in perfect lockstep, but is on a similar course to the broader property market.

[Andrew Andersen, VP - Equity Research at Jefferies Financial Group]

Thank you.

[Operator]

And our next question comes from the line of Jamie Inglis with Fribo Smith. Your line is open.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Hey, Jamie. What a pleasant How are you?

[James Inglis, MD & Partner at PhiloSmith & Company]

Evening. Bob, I was curious about your thoughts about risk adjusted return. You mentioned it a couple of times. You always do. But the question is, how often and when and how do you change your view about risk as by line?

[James Inglis, MD & Partner at PhiloSmith & Company]

And therefore, how does that affect the return? Do you know what I mean? It's like, is it a monthly, daily, annual thing? Because the world's changing fairly rapidly today. And therefore, I would assume that the underlying risks are changing as well.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

The way I would articulate it and then others on my end of the phone might have a a a view because this is well, Rich may have a thought, but my boss might have a thought as as well because, you know, this is very much a philosophical thing that goes back to day one when he slumped two sticks together to make fire. But long story short is that we are very preoccupied with this, and colleagues throughout the organization are talking about it daily. We have a fair amount of visibility every 30 days, and we have a painfully granular discussion about it by business, by product line every 90 days. Now just because we have the formality of monthly and quarterly, that in no way, shape, or form inhibits the discussion and if appropriate, taking action between those mile markers. Did you wanna add to that?

[William R. Berkley, Executive Chairman at W. R. Berkley]

I I would only add that, you know, one case that goes in a way you never imagined could make you change your mind about a line of business. It's a continuous process for watching how things are going and seeing is there something you didn't expect? Is there something that causes you to reevaluate? Otherwise, it's a continuous process of examining the risks you see in the courtroom, in the underwriting, whatever. But there was a bad malpractice case in Philadelphia that was decided last week.

[William R. Berkley, Executive Chairman at W. R. Berkley]

Obstetrician had a terribly bad decision. Well, that makes you think about what happens about malpractice and obstetrics and all those things. It just it brings it to your attention. So I think it's a continuous process of staying on top of what's happening and how our decision is going, and you're looking at those things on a continuous basis.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Let's see. Anything you wanna add?

[Richard Baio, EVP & CFO at W. R. Berkley]

No. I'm sad.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Okay.

[James Inglis, MD & Partner at PhiloSmith & Company]

Excellent. Great. Thanks a lot, guys.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Thanks. Abby, anybody else out there?

[Operator]

No. That will conclude our question and answer session. So I would love to turn the conference back over to mister Rob Berkley for closing remarks.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

Abby, thanks for the the help and hosting us. And, thank you to all the participants. I think that it was a a very solid quarter and, again, sort of a story continuing to unfold as promised. I think it's a reminder of the stability of the earnings of the business, whether it's a quarter like one or a quarter like two, we're able to continually and consistently create value for shareholders. Beyond that, I think there's a fair amount of visibility at this stage, not just for the balance of this year, but beyond as to it is likely that this organization will continue for the foreseeable to be able to generate high teens, low twenties returns, and we are very optimistic and confident in our ability to achieve that.

[W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley]

So again, our thanks to all for tuning in, and we will look forward to catching up with you in about ninety days. Thank you very much. Good night.

[Operator]

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.

Participants

Analysts

• W. Robert Berkley, Jr, Director, President & CEO at W. R. Berkley
• Richard Baio, EVP & CFO at W. R. Berkley
• Robert Cox, VP - Equity Research at Goldman Sachs
• Alex Scott, Equity Research Analyst at Barclays
• Elyse Greenspan, Managing Director at Wells Fargo
• Michael Zaremski, MD & Senior Equity Research Analyst at BMO Capital Markets
• Andrew Kligerman, Managing Director at TD Securities
• Mark Hughes, Analyst at Truist Securities
• David Motemaden, MD & Senior Equity Research Analyst - Insurance & Business Services at Evercore ISI
• Wes Carmichael, Senior Analyst at Autonomous Research
• Ryan Tunis, Managing Director at Cantor Fitzgerald
• Josh Shanker, Managing Director at Bank of America
• Brian Meredith, Managing Director at UBS Group
• Meyer Shields, Managing Director at Keefe, Bruyette & Woods (KBW)
• Andrew Andersen, VP - Equity Research at Jefferies Financial Group
• James Inglis, MD & Partner at PhiloSmith & Company
• William R. Berkley, Executive Chairman at W. R. Berkley